BP bosses 'will feel the pinch'

Wednesday 30 October 2002 12:36 BST

THE board at BP is heading for a hefty pay cut after the oil giant slashed forecasts for the third time. 'My pay and other senior executives' pay will most definitely be down this year,' said chief executive Lord Browne. 'This is a performance-based company, and if the performance goes down so does the pay.'

It is unlikely to mean belt-tightening at Browne's lavish Chelsea home. He earned £3m last year.

BP has lost 37m barrels' output this year due to Gulf of Mexico hurricanes and technical and safety problems in Alaska and the North Sea. Browne says 'these are explanations, not excuses' and admits he is 'deeply disappointed'.

With lower oil prices these cut third-quarter underlying profits 13% year-on-year, although oneoff gains lifted pretax profits 13% to £2.28bn. Dividends fall 20% to 6.61p. It is the third time in two months that BP has slashed forecasts. The shares slumped 30 1/2p to 392 1/2p, a four-year low and 16 times likely earnings.

Browne is reviewing costs and strategy to combat BP's growing 'middle-aged spread'. He also fears US oil companies will get plum contracts in Iraq if Saddam Hussein is overthrown. 'There must be a level playing field for oil companies to get in there.' BP has detailed knowledge of the country's reserves from work there for decades before the Gulf War.